A Study on Behavioural Traits of Risk Averse Investors: Evidences from India

SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES	VOL. 16	NO. 2	PAPER 12
10.5958/2321-2012.2020.00022.6
A STUDY ON BEHAVIOURAL TRAITS OF RISK AVERSE INVESTORS: EVIDENCES FROM INDIA

Athar Mahmood* Moid U. Ahmad**
* Jaipuria Institute of Management, Lucknow, India Scholeio (OPC) Private Limited, NCR, India

Behavioural finance is one field of study, which tries to explain the financial anomalies, in relation to individual traits and biases. Since personal biases like risk aversion, may result in market anomalies, it is imperative to explore it. In this paper, we attempt to study risk averseness in Indian investors, by conducting a survey on behavioral traits, which are pertinent to financial and investment decisions. The research was based on a survey, which generated 186 responses to questions on risk averseness and related behavioral traits. Initially, demographics of investors were analyzed, followed by correlation and regression analysis. Three behavioral traits related to thumb rule, natural calamity and double mindness were found to be closely associated with risk aversion. The findings of the research would be useful for market participants, for business development and product development.

KEYWORDS: Risk aversion, Behavioral finance, Demographics, Financial anomalies and Survey

JEL CLASSIFICATIONS: G40, G41, J10, A12, C21, C83 and G10